GE CEO Immelt Gives Thumbs Up To GE's Pivotal Investment6:56 PM EST Wed. Apr. 24, 2013
General Electric Chairman and CEO Jeff Immelt Wednesday made sure the technology industry knows where the $150 billion conglomerate is placing its big data business bet.
GE said it is taking a 10-percent stake in the new EMC-VMware-backed Pivotal big data business applications and services venture. And Immelt himself declared the investment a "leading edge" bet that could drive billions of dollars in profitability for the fifth largest company in the U.S. and its customers.
Appearing in a videotaped address as part of the formal announcement of GE's $105-million investment in Pivotal, Immelt touted the partnership as a driver in GE's bid to bring "industrial internet" capabilities to the vast array of GE business products and services.
Pivotal and GE, Fairfield, Conn., in fact, said they aim to enter into a "broad research and development and commercial agreement aimed at accelerating GE's ability to create new analytic services and solutions for its customers."
GE said it will use the software platform powered by Pivotal not only in its Global Software Center but also across its businesses. That means putting sensors in a wide range of GE products and services, collecting data and using it to remake businesses, driving dramatic productivity gains and savings.
"We want to be on the leading edge [of big data]," said Immelt. "We see Pivotal as going to be an important partner on that [with] your ability to help us manage a lot of this data [in] real time and be able to transform and put it to use on behalf of our employees and our customers."
The GE investment and business agreement, which are expected to be finalized in the second quarter, were the big surprise in the formal launch of Pivotal, which also committed to a fourth-quarter release of Pivotal 1.0, a complete, "next-generation enterprise platform as a service."
Pivotal is focused on providing a new platform for businesses to quickly construct and deploy big data business applications in the mold of consumer Internet companies like e-commerce behemoth Amazon and search engine giant Google. "Some people think Amazon is going to conquer the world," said one top executive for a national solution provider working with Amazon, EMC and VMware. "But there are some weaknesses in their strategy. When you get into high-end production workloads, companies are going to need a more sophisticated approach like Pivotal."
Amazon has a long-standing policy of not commenting on competitors.
Immelt, for his part, said he sees "smart machines, big data and analytics and mobile workforces" as critical to GE's success in the future. "[We see] those coming together for airlines and utilities and oil and gas companies to drive great applications, like no unplanned downtime, asset optimization and enterprise optimization and just very small changes in our products' performance and our customers' performance [that] will drive billions of dollars in profitability, great improvements in on-time delivery and consumer and patient experience," he said.
GE's Global Software Center, based in San Ramon, Calif., which now has some 425 developers working on industrial Internet big data services, plans to use Pivotal's technologies "as a standard source for delivering data analytics and cloud architecture." The GE Software Center of Excellence launched nine new services last year and plans to launch 20 new services this year.
NEXT: Why GE Is Making The Big Pivotal Investment
GE Vice President and Corporate Officer Bill Ruh, who joined the industrial behemoth two years ago from Cisco, said the Pivotal bet will help GE make "machines that are more intelligent." GE sees the last decade as the "consumer Internet" era and the coming decade as the industrial Internet era, he said.
"For GE we realize we are going to have to make our machines more intelligent," he said. "We are going to collect a lot of data. We are going to look to build those analytics that are going to provide that productivity. And we think all of that is going to foundationally change the architectures in how we generate energy or how we fly airlines or how we do healthcare, how we do rail, how we do mining and so on. This is a foundational change in the industries we serve. I think it is just going to be an exciting 10 years [ahead]."
One example of GE's focus on big data is using software and services to save huge costs in the aviation business on fuel, maintenance and operations.
Last November, for example, GE Aviation created a new joint venture with systems integration giant Accenture called Telaris, aimed at leveraging some of the big data being gathered from aircraft.
Telaris downloads all the data from all aircraft and does analytics aimed at predicting "failure of systems and parts," said Ruh. "The whole idea is can I move maintenance from unscheduled to scheduled?"
Another example, said Ruh, is using the big data technology to more efficiently run GE wind turbines to collect real-time data aimed at getting wind farms to operate more efficiently and generate more electrical output.
Ron Dupler, the CEO of GreenPages Technology Solutions, a Kittery, Maine-headquartered national cloud computing solution provider and onetime VMware partner of the year, said the GE investment is "huge validation" for the big data market and for Pivotal. He said GreenPages is looking forward to partnering with Pivotal to deliver big data applications and services to businesses. "This is a natural for us based on our relationship with VMware, EMC and [Pivotal CEO] Paul Maritz and the team," said Dupler.
Even though Pivotal is squarely focused on derailing Amazon Web Services' market momentum in the business market, Maritz and Pivotal Senior Vice President of Products and Platform Scott Yara avoided criticizing the Web giant.
In fact, Yara acknowledged the debt that Pivotal owes to consumer Internet big data giants like Amazon. "We are building on the shoulders of giants," said Yara. "We look at all of the advances that have come from not only our parent company VMware but Amazon, really, in building the leading cloud infrastructure service in the world and of other emerging platforms like OpenStack. I think this is the new modern hardware."
Maritz himself said the cloud independent mission of Pivotal means the company will embrace infrastructure-as-a-service offerings like Amazon Web Services and OpenStack even if they compete with Pivotal parents EMC and VMware. "We are independent of those two companies, fully authorized to work both collaboratively with EMC and VMware, but also work collaboratively with their competitors. As you can see, we are going to embrace Amazon and OpenStack and other architectures as well."
EMC Chairman and CEO Joe Tucci in an analyst conference call Wednesday, said Pivotal was set up just like VMware, as a separate company to build an ecosystem that is industry wide. "I think you'll see that come to fruition," he said. "There's a lot of -- I don't want to go further than I'm going -- there's a lot of interest in what we're doing with Pivotal."
PUBLISHED APRIL 24, 2013